John A. Miller and Aaron D. Roepke have made available their article to be published in the Idaho Law Review. The abstract is as follows:
In the United States Medicare provides near universal government sponsored health insurance for the elderly. This system has one very large gap. It does not pay for custodial care. Instead custodial or long term care is regarded as a matter of personal responsibility. Since the costs of such care can easily exceed $100,000 annually, the disabled elderly typically become impoverished over time. It is at this point that another federal program, Medicaid, enters the picture. Medicaid will pay the excess long term care costs of an impoverished disabled person. Medicaid is federally funded but relies on the states to administer the program and the states, thus, serve as the gatekeepers for the Medicaid system. Within the general constraints imposed by federal law, it is the states who determine if a person qualifies for this means tested assistance, and it is the states who disburse the funds to the caregivers, typically nursing homes. There are significant differences in how Medicaid is administered from state to state. In this article we focus on the State of Idaho.
Most of the people who end up on Medicaid do not start out impoverished. Instead it is the cost of care that impoverishes them through a process often referred to as “spend down.” Depending on their resources at the beginning of spend down, the process can be quick or slow. But for many of the disabled elderly paying for long term care is an inexorable journey into poverty. This process of impoverishment is marked by a number of decision points that may go unnoticed by the naïve or ill-informed. However, the well advised have a number of choices to make during their descent into poverty. Through “Medicaid planning” there are many ways to ameliorate the financial disruption to applicants, their spouses and their families caused by the cost of long-term disability. In this article, we explain the structure of Idaho’s version of Medicaid and illustrate some of the planning opportunities and strategies that are available to disabled seniors and their families.
Download full article at: Medicaid Planning in Idaho by John A. Miller, Aaron D. Roepke :: SSRN
Posted by Logan Davis, Associate Editor, Wealth Strategies Journal.